Qwest Awaits High-Stakes Decision

Federal officials are weighing whether to bar Qwest from future government contracts, the Denver telecom service provider said.

The decision, which rests with the General Services Administration (GSA), the government’s procurement arm, is the latest development in a 14-month review.

The action stems from last year’s indictment of four former Qwest employees who allegedly improperly booking revenue related to an Arizona School Facilities Board deal the previous year. They pleaded not guilty.

A civil complaint filed by the Securities and Exchange Commission in the matter, as well as for a separate Qwest transaction with Genuity in 2000.

A Qwest spokeswoman was not immediately available for comment. A GSA spokeswoman was not reachable because government offices in Washington, D.C., are closed due to Hurricane Isabel.

In a statement, Qwest said, “The company is cooperating fully with the GSA and believes that it will remain a supplier to the government, although it cannot predict the outcome of this referral.”

Qwest recently won a contract from the National Institutes of Health (NIH) for Web hosting and other network services valued at $40 million over 10 years.

Under terms of the deal, Qwest company will provide collocation and communications services to ensure the confidentiality and availability of data across its 27 NIH U.S. facilities.

The GSA isn’t shy about locking out telecoms if it has accounting questions or concerns. It previously banned MCI (formerly WorldCom) and is considering similar action against Sprint.

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